Some Slowing In Global Housing Correction, Momentum Remains Negative

The housing correction continues across developed markets in an orderly fashion but the latest data in a number of countries showed a slowing in the decline in house prices. People may be waiting to sell given the current environment thus reducing supply. But 3-month momentum remains negative and given that and the rally prior to 2022 prices likely have further to go before they trough. Corrections are proceeding at different speeds given mortgages in some countries are more exposed to rate hikes than others and varying indebtedness.

• Australian CoreLogic February house prices fell only 0.1% m/m to be down 9.2% y/y, higher than the average decline of 1.1% despite the RBA hiking 325bp.
• CoreLogic NZ February house prices fell 1% m/m after -0.3% bringing the annual rate to -7.2% (Jan -5%). Prices are now 9.5% off of their peak. Given the recent cyclone, data in the coming months is probably going to be hard to read.
• US FHFA house prices fell another 0.1% m/m in December and the Case-Shiller -0.3%. The US is still early in its correction as it is only 0.9% below the peak and still up 6.6% y/y despite 450bp of Fed tightening.
• Korean house prices rose 25.7% over the pandemic period and the household debt ratio is over 200%. The housing correction began in July 2022 and prices are now 5% below the peak. They fell 0.8% m/m in February to be down 4.4% y/y.
• In Europe, the Netherlands, Sweden and Norway saw house prices rise in January due to seasonal factors. Sweden’s correction is the most advanced with prices down 10.7% from the peak but only down 4.6% y/y. Nationwide house prices fell 0.6% m/m to still be up 1.2% y/y with the UK correction only in the early stages.

Source: MNI - Market News/Refinitiv/CoreLogic